Gulf oil production disrupted by the Iran conflict could largely recover within months if the Strait of Hormuz reopens safely and remains secure.
This is according to Goldman Sachs, quoted by Reuters on Friday.
The bank said the pace of recovery will depend on logistics, well performance and whether there are renewed attacks on energy infrastructure.
The outlook comes as prolonged disruption in one of the world’s most critical oil routes continues to raise concerns for global energy markets.
What the report is saying
Goldman Sachs estimates a significant share of Gulf oil production remains offline, though much of the disruption stems from precautionary shutdowns rather than permanent damage.
- About 14.5 million barrels per day of Gulf crude output, representing roughly 57% of pre-war supply, was offline in April.
- The Strait of Hormuz normally handles about one-fifth of global oil flows, making disruptions a major risk to energy markets.
- External forecasts cited by Goldman suggest Gulf producers could recover about 70% of lost output within three months.
- Recovery could reach about 88% within six months if the waterway reopens and conditions remain stable.
The bank said spare capacity in Saudi Arabia and the United Arab Emirates could support a relatively swift production rebound.
More Insights
Despite the recovery outlook, Goldman warned that logistical and operational constraints could slow the pace of supply restoration.
- Available empty tanker capacity in the Gulf has fallen by about 130 million barrels, or roughly 50%, limiting export flexibility.
- Prolonged well shut-ins could reduce flow rates, particularly in lower-pressure reservoirs, requiring technical work before full output resumes.
- Iran and Iraq face higher recovery risks due to infrastructure challenges, sanctions and reservoir characteristics.
- Saudi Arabia is expected to be better positioned to ramp up production faster than some regional peers.
The bank cautioned that the longer disruptions persist, the greater the risk of lasting supply damage.
The outlook for Gulf oil production remains closely tied to geopolitical developments and the reopening of the Strait of Hormuz, which remains central to global energy security.
What you should know
Earlier, Nairametrics reported that Goldman Sachs lowered its second-quarter 2026 forecasts for Brent and U.S. crude to $90 and $87 a barrel, respectively, following the announcement of a two-week ceasefire between the U.S. and Iran.
Previously, the bank had projected Brent and West Texas Intermediate (WTI) prices at $99 and $91 a barrel, respectively.
In March, Goldman Sachs raised its oil price forecast for 2026 to $85 per barrel, significantly above Nigeria’s budget benchmark of $64.85.
- In late February, Nairametrics reported that Goldman Sachs had already revised its oil outlook, projecting Brent crude to average $60 per barrel in the fourth quarter of 2026, reflecting tightening inventories and shifting global market dynamics.
